15 Sales, production and material L02, 3, 4 purchases budgets Living Comer sells home wares and various other reading- related products. One of the store's most popular products is the fluffy lounge pillow. The pillows each sell for $16.00. Originally the pillows were handmade by a local artisan. The store's owner has been impressed with the demand for the pillow and has recently begun a small manufacturing company to produce and distribute the pillows to other stores. Estimated sales for the fourth quarter (in units) are as follows: October 8500 November 9200 December 11600 Total 29 300 Each pillow requires half a metre of fabric that costs, on average, $12 per metre. REQUIRED a Prepare a sales budget for the fourth quarter based on the above information. b Prepare a production budget for the pillow manufacturing company. The company did not have any inventory at the end of September, but they want to maintain a 20 per cent inventory at the end of each month based on the next month's estimated sales. January's sales are expected to be low, given the post-holiday trends and are estimated to be 5800 units. c Prepare a fabric purchases budget. The company did not have any inventory of fabric at the end of September, but they want to maintain a fabric inventory equal to 10 per cent of the next month's material needs. January's projected production is expected to be 5820 units